How Juicy Is Southern Company's 4% Yield?

May 22, 2023 2:52 AM ETThe Southern Company (SO) StockSO28 Comments

Summary

  • Southern Company is a stable utility stock with a 4% yield, transitioning to natural gas and nuclear energy, aiming for net-zero emissions by 2050.
  • The company benefits from growth in the Southeast service territories due to supply chain re-shoring and has a strong dividend track record with 22 consecutive years of increases.
  • Despite a sizable debt, Southern Company has a healthy balance sheet and is outperforming its peers, with a reasonable valuation presenting potential buying opportunities.

3D-Darstellung der konzeptionellen industriellen Verschmutzung isoliert auf weißem Hintergrund

karelnoppe/iStock via Getty Images

Introduction

When dealing with regulated utilities, I cannot say that I'm very passionate about the companies I cover. I consider electric utilities to be extremely boring companies that don't excite me, like railroads, aerospace companies, or fast-growing high-tech companies.

This article was written by

43.2K Followers

Leo Nelissen is an analyst focusing on major economic developments related to supply chains, infrastructure, and commodities. He is a contributing author for iREIT®+HOYA Capital.

As a member of the iREIT®+HOYA Capital team, Leo aims to provide insightful analysis and actionable investment ideas, with a particular emphasis on dividend growth opportunities. Learn More.

Analyst’s Disclosure:I/we have a beneficial long position in the shares of DUK either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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